May 12, 2016

A curious trend is emerging when it comes to renewable
energy mandates: Many states that have them are doubling down, while those that
don’t are showing little interest at all.

Since 2009, only Vermont has enacted a new renewable
portfolio standard (RPS), yet five states with an RPS on the books strengthened
them in the last two years alone.

The discrepancy has more to it than a simple increase in
political polarization. While that’s apparent across the nation, the debate
behind Maryland’s recent decision to strengthen its renewable energy standards
shows there’s more to the recent trend than ideology alone.

The number of states with RPS laws has plateaued since
a slew passed in the 2000s, but states with them continue to update policies.

The Maryland RPS coalition

Last month, Maryland lawmakers approved the Clean Energy
Jobs Act of 2016 (SB
921) by large majorities in both houses, increasing the state renewable
portfolio standard (RPS) from
20% by 2022 to 25% by 2020.

Getting to the 31-14 vote in the Senate and 91-48 vote in
the House on the last day of the 2016 General Assembly did not come easy.

“It took a lot of good work to get this bill across the
finish line this year,” Maryland State Delegate Bill Frick (D) told Utility
Dive.

Last year, he said, the bill did not pass “because a lot of
legislators wanted to know what good it would do people in distressed parts of
Maryland where the priority is jobs and the ratepayer impact would be very
real.”

But this time around, “there was a concerted effort to win
those members over,” he said.

The work was done by a broad coalition with disparate
interests. It was put together over three years, said Tiffany Hartung, manager
at the Maryland Climate
Coalition (MCC).

“The first year we introduced the topic to the legislature
and the second year we worked to build more grassroots power," she said.
"This year we started with a lot of support and built on that.”

The coalition began with environmental groups and brought in
business and labor organizations in the second year. In the past year, they
reached out to health care groups and faith groups. Each of those then engaged
their constituencies, Hartung said.

Choptank Electric
Cooperative, the biggest cooperative on Maryland’s rural, largely
conservative Eastern Shore, was the main utility supporting the bill, said
James McGarry, policy director at the Chesapeake Climate Action Network (CCAN).

“A lot of the state’s clean energy installations have been
built on that region’s open land,” he said.

Pepco and Baltimore Gas and Electric, both Exelon
subsidiaries and the state’s largest two investor-owned electricity providers,
didn’t take a position on the bill.

“It is likely they didn’t see any financial reason to oppose
it,” McGarry said.

A spokesperson for BGE confirmed that, saying in an email
that the “increase in the standard is modest compared to bills proposed in
previous General Assembly session, which means the new standard will have a
more modest impact to customers who ultimately pay for the higher cost
generation source to comply with this state policy.”

But for Frick, it was the new content in the 2016 bill that
pushed it over line, while also providing a lesson for RPS policies nationwide.

Since this map was published last October, Oregon doubled
its renewable energy mandate to 50% and banned coal-fired electricity from the
state by 2035.

It’s the economy...

Passing the RPS bill in 2016 was about more than just the
environment, Frick said. It also had to do with recognizing the economic
benefits of the current renewable energy standard and building a coalition to
enhance them.

While economic concerns derailed the RPS boost in the last
legislative session, backers addressed the issue head-on this time, writing in
provisions to support women- and minority-owned businesses and enhance energy
job training.

An indication of the economic argument’s importance, Frick
said, was demonstrated by Senate Majority Leader Cathy Pugh (D). Though she
voted against the RPS bill in the last session, she agreed to be a sponsor of
the current bill in the Senate this time around.

“It didn’t have the workforce development and small business
provisions in 2015," Frick said. “Adding those things to the bill moved
her from a skeptic to a supporter and her support was pivotal.”

Multiple attempts to reach Sen. Pugh’s office for comment were
not returned.

RPS skeptics

The Maryland RPS expansion passed by wide margins in both
state houses, but that doesn’t mean there was not opposition to overcome.

Maryland Potomac Edison, a subsidiary of FirstEnergy,
testified against the Maryland bill because it “would result in significant
increases in the cost of generation in Maryland.”

"The most economical solution for renewables is
competitive markets, not regulatory mandates,” according to the utility’s
filing with the legislature. Regularly increasing the mandate creates
“uncertainty” which results in “additional risk premiums” and “financial burden
on customers,” the filing added.

“Our opposition is based on not wanting our Maryland Potomac
Edison utility customers to face increased costs," said Todd Meyers, a
spokesperson for the company. “This has been our consistent position with
respect to changes in the RPS.”

FirstEnergy’s concerns were echoed in a national context by
Travis Kavulla, the president of the National
Association of Regulatory Utility Commissioners(NARUC), the organization of
state utility regulators.

“A renewable standard is only good or bad depending on
whether it achieves its goals,” he told Utility Dive last month. But if the
goal is to deal with carbon dioxide emissions, “renewable standards are an
inefficient way to do it.”

A carbon tax or fee, though less politically feasible, is
more efficient, he said.

“Most economists would say that if carbon is the issue, have
a policy that is for abating carbon. We need to ask what renewable standards
are aiming at.”

Green, in both ways

The Maryland bill was designed to confront and resolve the
economic concerns raised by the likes of Kavulla and FirstEnergy, McGarry said.

The intent of the original mandate, he said, was not simply
to boost renewable energy, but to meet the
2009 Greenhouse Gas Emissions Reduction Act(GGRA).

“It required the state to develop a GHG reduction plan to
reduce emissions 25% by 2020," McGarry said. "And when it was signed
into law in 2012 by Democratic Gov. Martin O’Malley, its number one
recommendation was to increase the RPS to 25% by 2020.”

Earlier this year, before passage of the new RPS, current
Gov. Larry Hogan (R) signed an
extension of the 2012 GGRA, strengthening the mandated GHG reductions
to 40% by 2030.

From the beginning, backers of the mandate also addressed
the economic concerns, according to McGarry.

“The original 2004 Maryland RPS was signed into law by
Republican Gov. Bob Ehrlich,” he said. “It was intended to combat climate
change but also to diversify the state’s economy and create clean energy jobs.”

Since then, the renewables standard is on track to create
about 30,000 jobs and grow the state’s economy by $1.6 billion, McGarry said.

That economic impact, in turn, could give a clue as to why
states like Maryland have looked to strengthen their RPS standards in recent
years — they see the tangible economic benefits of the standards, while critics
often focus on potential costs of such mandates.

“The economic benefits of the policies have become clear,”
McGarry said. “The state solar industry now has 170 companies and 4,300 jobs.”

All eyes on Hogan

While the strengthened RPS bill was passed last month, Gov.
Hogan has yet to sign it or even indicate a concrete position on the matter.
But that shouldn’t be taken as a sign of opposition, McGarry said.

“It is not an indication of a lack of support,” Delegate
Frick said. “His administration did not oppose the bill.”

In Maryland, state bills are signed into laws on specific
days. This year, two signing days remain — May 10 and May 19. Hogan has the
choice to sign the bill into law, to allow it pass into law without his
signature, or to veto it.

The governor’s office did not return multiple requests for
comment, but McGarry expressed confidence the governor would sign it. Polling done by CCAN
shows overwhelming bipartisan voter support, he said, and the RPS has already grown businesses
and jobs in Maryland.

Projections show the new bill will add more than a 1,000 new
solar jobs and open up financing opportunities for small minority-owned and
women-owned businesses. What’s more, he said, the state needs more renewable
energy capacity to meet the strengthened greenhouse gas goals Hogan signed into
law last month.

Delegate Frick, like his coalition partner, was “optimistic”
the governor would sign the bill. Cutting greenhouse gas emissions and building
renewables offers both environmental benefits and economic opportunities to
build the middle class and grow jobs and "that is a winning formula,"
he said.

"Too often dealing with environmental issues is viewed
as a zero-sum game between environmental gains and job losses,” Frick said. “In
Maryland, we think it is going to put people to work.”